Evolution Production Up but Profit Down

Evolution Production Up but Profit Down
Evolution posted $289 million in quarterly net income.
Image by Yarygin via iStock

Evolution Petroleum Corp. has reported a quarter-on-quarter growth in production and revenue but a decline in net income for the third quarter of fiscal year 2024.

Evolution reported a total revenue of $23.0 million for the quarter, reflecting a 10 percent increase compared to the second quarter of FY 2024. Oil revenue experienced a more significant rise of 24 percent, reaching $14.5 million, Evolution said in its quarterly report. This can be attributed to a 25 percent increase in sales volumes, despite a slight decrease in realized commodity pricing.  The growth in sales volume is primarily due to the SCOOP/STACK acquisitions and new Chaveroo oilfield production.

However, net income for the quarter came at $289 million, a 73 percent decline compared to the $1.08 billion reported for Q2 2024. The company cited funding for the SCOOP/STACK acquisitions with cash on hand and borrowings under its senior credit facility as a contributing factor to the lower net income.

"We have added scale, diversification, and investment flexibility to our portfolio. The production for a portion of the quarter from our SCOOP/STACK acquisitions and the incremental production from 19 newly drilled SCOOP/STACK wells, as well as production from the initial three wells at Chaveroo, were instrumental to our performance this quarter”, President and Chief Executive Officer Kelly Loyd said.

Total production for the quarter reached 7,209 net barrels of oil equivalent per day (boepd), representing an increase of approximately 1,020 boepd compared to the second quarter of FY 2024. Besides the completion of the SCOOP/STACK acquisitions in mid-February, contributing an estimated 500 boepd, the initial production from the three wells in the Chaveroo oilfield, which began in early February, boosted production, Evolution said.

Oil production saw a 27 percent increase to 2,187 bpd compared to the previous quarter. This rise was driven by the SCOOP/STACK acquisitions and the Chaveroo wells but partially offset by decreased production at Delhi and the Williston Basin due to cold weather downtime in January 2024.

Natural gas production also climbed 10 percent to 23.2 million cubic feet per day (MMcfpd), or 3,879 boepd.  The addition of approximately 2.4 MMcpfd from the SCOOP/STACK acquisitions was the primary driver, although this increase was partially dampened by natural production decline and winter storm downtime in the Barnett Shale, the company said.

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